Call for local lending approach

Posted on 2 Sep 2010 by The Manufacturer

The head of MAS West Midlands has called on banks to reintroduce local business bank managers in order to increase commercial lending.

Simon Griffiths says manufacturers are still waiting for lending availability to increase despite major high street banks returning to profitability and, in his opinion, businesses by and large having sound business plans and good prospects for growth.

“In the days of a local manager he or she had such good working relationships with their customers and could spot a winner when one came along,” he said.

“I have visited numerous manufacturers in our region and those making strides forward are those that know exactly where they want to go and have put time into the three P’s – Product’s, Processes and People.

“Generally, these firms have embraced leading-edge technology for their production equipment and upskilled their employees to maximise the benefit of this technology. More often than not, there is either a unique or innovative product they can offer their customers and for which a premium price can be demanded.”

He says a lack of communication on between banks and businesses means these unique selling points which warrant investment are not recognised by the lenders.

“If the money is there to be loaned, the business case is right and there is confidence in management, then it should be a win-win for both parties,” he says.

Though controversial, he says the reintroduction of local business bank mangers could provide the solution.